Roger Smith, who has died aged 82 after a brief illness, was the boss of General Motors, once America's biggest manufacturing company, throughout the 1980s, the longest serving chairman since the legendary Alfred Sloan. He spent or squandered $90bn on a huge reorganisation programme in an attempt to address the key questions facing the failing industry - the electronic revolution, Japanese competition, old-fashioned manufacturing and restrictive labour practices.

Although Smith initially turned GM's finances round, and his unflagging insistence on change is still applauded, his strategy was flawed and poorly executed, while his autocratic style was blamed for the disastrous slide of the corporation's market share from 46% to 35% of US car sales.

It brought him lasting if unwelcome fame as the target of Michael Moore's first film success, Roger & Me (1989), in which Moore pilloried him for the loss of 30,000 jobs in his own home town of Flint, Michigan. The film traded on the riff of Moore's recurrent attempts to confront Smith with the hardships and evictions he chronicled. Smith declined to watch the film, commenting: "I am not much for sick humour. I don't like things which take advantage of poor people."

Roger Bonham Smith made unlikely casting as a corporate villain. Of modest height, with a weak voice, wispy red hair and blotchy skin, he looked like the self-effacing accounts clerk he was when he started at GM in 1949. "I certainly didn't holler, 'look out, here I come'. No, I don't think anybody up here then was too worried about that happening."

He was born in Columbus, Ohio, before his father moved to Michigan to found a copper tubing business. Smith had part-time jobs there, followed by a brief stint in the US navy and business studies at Michigan University. He progressed through GM's finance function to become treasurer in 1970, then spent a formative two years running non-automotive international operations, before joining the board in 1974.

When he was appointed chairman in 1981, it followed the GM tradition of choosing "bean counters" rather than product men. NBC News even named him as "Roger Miller". But the company was in a mess after its first annual loss for over 50 years.

Three years later he was being hailed as the man shaking up Detroit, and the company was back in profit in his first year. He had correctly identified the problems of the traditional US car manufacturers in the face of the coming electronic revolution and the accelerating sales of Japanese cars, and started to act. He talked of "lights-out" factories operated by robots and set up a joint venture with the Japanese Fanuc company to build robots.

Although he shared the US industry's initial scorn for Japanese cars (telling me once that all major technological innovation had come from the US and Europe), he embraced an approach from Toyota, spurned by Ford, to establish a joint manufacturing operation in a redundant plant, where Americans learned lessons from the Japanese.

He launched the Saturn project - locating a new factory in Tennessee, far from traditional union territory, to build a new car from "a clean sheet" with new materials and techniques, describing it as "less labour intensive, less material intensive, less anything intensive". It was a modest success. Electronics was addressed in 1984 by the purchase first of Ross Perot's EDS company and then the Hughes Aircraft company with the promise (unfulfilled) of technological wizardry being transferred to saloon cars.

Most controversially, Smith reorganised the company away from five separate car divisions (marques such as Cadillac and Chevrolet), and, advised by McKinsey, he set up two groups - dividing small and large cars. It was reminiscent of the fatal Ryder reorganisation of British Leyland. This reorganisation, more than anything else, condemned his management as a failure. The disruption destabilised the corporation, management layers multiplied and products failed. Although there were some improvements, like the introduction of the first front-wheel drive cars, enthusiasts claimed that all GM cars now looked alike, with a Cadillac little more than a Chevrolet. Sales fell as costs almost doubled. Executives complained that the autocratic Smith loaded committees with his yes-men and the board had little say.

The new robot factory was a problem - paint robots famously painted one another; new plants in the midwest (including one built on a site cleared of existing homes in Poletown, Detroit) were still operated in old-fashioned ways. Relations with the unions, damaged when a wage freeze was imposed as executive bonuses were announced, remained confrontational. The EDS culture, intended to change attitudes, failed to adapt to the demands of heavy manufacturing. Perot walked away, complaining that "at EDS, if we see a snake, we kill it. At GM they form a committee." But he conceded that Smith "had a very clear notion of what he wanted GM to be and he worked night and day to try to accomplish that". Rick Wagoner, the latest chief executive to wrestle with GM's problems said last week: "He was a leader who knew the industry had to accept change, understand change and learn to make it work for us."

Smith was chairman until 1990, remaining on the board until 1993, when he was sacked with his chosen successor, Bob Stempel, after three consecutive years of losses. GM, and the entire US motor industry, has remained in crisis.

He is survived by his wife of 53 years, Barbara, and two sons and two daughters.

· Roger Bonham Smith, businessman, born July 12 1925; died November 29 2007